Berlin buys back its heating network from private sector

The city was the only bidder, and the authorities say they are doing this to ensure the pricing security of the heat supply

The State of Berlin announced that it will take over the ownership and operation of the district heating network after buying it from Swedish energy supplier Vattenfall. The local government was the only bidder for the sale after the process began one year ago.

Both sides announced that they had agreed on a purchase price of 1.6 billion euros. The Berlin Senate will present the financing concept to the House of Representatives in the first quarter of 2024. The transaction will be completed in the spring.

Berlin’s most important energy and climate decision for the decade

Berlin’s state government described the deal as “historic” and as one of “the most important energy and climate decisions” of this decade. However, it also seems to be motivated by socio-economic concerns.

It's about Berlin gaining influence on security of supply and also on price stability. This is possible in a completely different way than if some fund with the highest possible return expectation holds our Berlin district heating in its hands," explained Franziska Giffey, Senator for Economic Affairs.

Ms Giffey drew analogues from previous experiences with the nationalization of the water and electricity supply. It now seems that the state is getting closer to completing the return of these essential utilities back to the public sector.

The only service remaining in private hands for the time being is the gas supply network. However, the district heating deal also includes an option for the State of Berlin to take over Vattenfall's shares in the gas network operator Gasag.

Vattenfall wants to say goodbye to fossil fuels and has put its district heating business in Berlin to the test. But a final decision about a sale was pending until the very end. The district heating network provides heat to 1.4 million apartments in the German capital.